I have loads of student loans and currently do not have a job. I worked for several years out of college but barely had enough to repay my student loans. Of course now I have also accrued some significant credit card debt. I am looking for a job in my field but am having some trouble. Is bankruptcy a good option for me?
Bankruptcy appears to be an option for you but may not be your best solution, especially if your primary concern is your student loan debt. The law prevents a person from discharging certain debts through bankruptcy. Student loans are an example of a debt that may not be eliminated through bankruptcy.
Many options do exist, however, for reducing student loan payments. One example is to consolidate your student loans. Interest rates for student loans are still historically low and may be lower than the interest rate you received when first obtaining your loans.
There are also income-based programs that allow for repayment over a longer period of time. Under an income-based repayment option one can extend the repayment period from 10 years to 25 years and accordingly greatly lower the payment. There are also some corollary loan forgiveness programs based on hardships and other circumstances.
Unlike the student loan debt, the credit card debt is probably dischargeable through bankruptcy. Depending on the amount of debt you have and other factors, bankruptcy may be a good option to deal with this debt. However, of course one’s credit score is negatively impacted by filing for bankruptcy. This should be considered.
Filing for bankruptcy is always a difficult decision but may be the best or sometimes seemingly the only option for certain people. Making this determination requires a careful consideration of all your circumstances. A good bankruptcy attorney can help assess your financial situation and diagnose the best option for you.